Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: From Mahart where Innovation, Money and power Collie in Silicon Valley, Nbon.
Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 4: Live from New York and San Francisco. This is Bloomberg
Speaker 4: Technology coming up this hour. Apple sinks of the warning
Speaker 4: of warnings are there of weak demand for the new
Speaker 4: iPhone sixteen Pro model.
Speaker 5: Plus the European Union's most influential tech enforcer resigns. Details
Speaker 5: about the surprise move out of Russell's.
Speaker 6: And TikTok's courtroom battle where the US government.
Speaker 4: Begins its freedom of speech versus national security.
Speaker 5: Yeah, Apple is a big points drag to the downside.
Speaker 5: We're off session lows, but on track for our biggest
Speaker 5: drop intraday.
Speaker 7: Since August fifth.
Speaker 5: TF Security is International out with a research note a
Speaker 5: survey of early pre order data saying initial sales of
Speaker 5: iPhone sixteen generation the Pro thirty.
Speaker 7: Seven million units.
Speaker 5: That would be a drop of thirteen percent year on
Speaker 5: year for the first weekend of sales for the fifteen generation.
Speaker 5: That's care some panic in the market. There's several other
Speaker 5: analyst notes out today alongside TF International citing concerns from
Speaker 5: China to the timing of Apple Intelligence release. One calmer
Speaker 5: voice is Bloomberg Intelligence is Anna rag Rana, who joins
Speaker 5: us from Chicago.
Speaker 7: Now, and Ana rag.
Speaker 5: You're basically saying, we can't determine now that this is
Speaker 5: anemic demand. It could be oversupply of the available handset.
Speaker 7: What's your thesis? So when you look at it.
Speaker 8: A few weeks ago, we heard that Apple was talking
Speaker 8: to with supply, do we increase the shipments for this
Speaker 8: particular model by about ten percent? So, you know, frankly speak,
Speaker 8: there's lots of puts and takes. At this point, we
Speaker 8: think it's still too early to basically call this a dud.
Speaker 8: So we're going to wait for another thirty days. Thirty
Speaker 8: five days, here's some official comments from Apple when they
Speaker 8: actually announce their earnings to really figure out what shipments
Speaker 8: could be for the next financial year.
Speaker 4: Can you give us context as to how much you
Speaker 4: look at your securities. How much does this sort of
Speaker 4: pre order data tend to fluctuate with reality?
Speaker 8: You know, it does fluctuate, and you know where sometimes
Speaker 8: there are supply constraints, sometimes there is spikes and demands
Speaker 8: in the earlier side of it, which is why I'm saying,
Speaker 8: if you look at it for a twelve month cycle,
Speaker 8: you know it could vary quite a bit before. I
Speaker 8: mean seasonally fourth quarter is fourth or the December quarter
Speaker 8: is the big quarter for Apple, and this is where
Speaker 8: we could see some jump because of some improvement in China.
Speaker 8: On the other side, it could go the exact opposite
Speaker 8: way if China is weak of consumers, is not very good.
Speaker 8: So there is so much dependent on the next thirty
Speaker 8: to ninety days more than just you know, the first
Speaker 8: three days and.
Speaker 5: Away from the early pre order data for iPhone. Other
Speaker 5: analysts talk about China in the context of domestic competition.
Speaker 7: Now that you've seen what.
Speaker 5: Huawei has to offer, how do you model that domestic
Speaker 5: competition in China?
Speaker 8: So I would say that if you look at it,
Speaker 8: there was a big spike in demand because of Huawei
Speaker 8: releasing its five G phone. Now there has been many
Speaker 8: years since they didn't do that, and then because of that,
Speaker 8: there was a you could say, a pull forward in
Speaker 8: demand for them of the normal refresh cycle for that
Speaker 8: particular brand. For Apple, Apple has to fight quite a
Speaker 8: bit now to gain market share again in China. And
Speaker 8: I think we you know, if there are going to
Speaker 8: be any discounts from Apple anywhere in the world, we
Speaker 8: think it's going to be in China at this point. Now,
Speaker 8: the new form that came out from ourweh the twenty
Speaker 8: eight hundred dollars one. I don't think that does that
Speaker 8: damage to Apple's iPhone sales because it's two different categories.
Speaker 4: Frankly, we're seeing weakness and supplies to Apple as well,
Speaker 4: Anna Rag.
Speaker 6: At the moment, what's.
Speaker 4: The next data point, what's the next read we should
Speaker 4: focus on.
Speaker 8: I think when the company announces their results and then
Speaker 8: you will get some official comments as to how those
Speaker 8: pre orders are. I think that's far more important than
Speaker 8: this time. The second thing we want to see is
Speaker 8: when are the AI features coming out and what kind
Speaker 8: of buzz is around it, because I think that can
Speaker 8: change consumer sentiment very quickly if there are cooler things
Speaker 8: that people can play with the phone, and that can
Speaker 8: help drive some of the sales as well.
Speaker 4: Anna Rag, So please to get as ed put it
Speaker 4: your calm voice on today's show with Meg Intelligence, Anna Rograna. Meanwhile,
Speaker 4: let's just pivot to the EU because the top tech
Speaker 4: legislation enforcer, Thierry Breton has resigned.
Speaker 6: Now let's her post it on X.
Speaker 4: Bretton antline the surprise move, saying France was asked to
Speaker 4: provide a different nominee for the European Commission, writing quote,
Speaker 4: in light of these latest developments for the testament to
Speaker 4: questionable governance, I have to conclude I can no longer
Speaker 4: exercise my duties in the College. For more, Bloomberg's John
Speaker 4: Paicelli joins US now from Brussels. Bretton really had a
Speaker 4: key hand here and shaping the ease response to what
Speaker 4: seemed to be growing power of US tech. He was
Speaker 4: the enforcer of the Digital Services Act.
Speaker 6: Why is he out.
Speaker 3: Well seems to be mostly because he and Bonderlion didn't
Speaker 3: go didn't get along well together. I mean, if you
Speaker 3: read the letter, he clearly said that vonderlyon president. The
Speaker 3: European Commission demanded that requested the France propose a different
Speaker 3: candidate due to personal reasons that Bretton himself was not
Speaker 3: familiar with. So he has always been a bit of
Speaker 3: a heavy hitter, a bit of a maverick within the Commission.
Speaker 3: He certainly loved the limelight and that probably wrapped some
Speaker 3: people the wrong way. At the end of the day,
Speaker 3: you of course actually have had that to a Byton's
Speaker 3: spearheaded some of the u's most important rule books when
Speaker 3: it comes to tech and digital regulation. But those things
Speaker 3: are done, those laws exist, the bureaucrats enforcing them are
Speaker 3: in place. So even if Briton is not there in
Speaker 3: a way, his spirit, his ghost will keep living. So
Speaker 3: that's not necessarily a big worry for the Commission.
Speaker 4: Well, his ghost leve On and Stephan Sir John, who
Speaker 4: Maconn has already tapped.
Speaker 3: Well, we don't know yet because it depends on what
Speaker 3: kind of portfolio so John will get, and that's not clear.
Speaker 3: It's going to be for sure media than what Burton
Speaker 3: will have gotten. That was essentially the offer on the table,
Speaker 3: right Maconn was told for personal reasons, I don't like Burton,
Speaker 3: according to what Breton says. Therefore you get a media portfolio.
Speaker 3: If you propose another name and Stephan Sir John towards
Speaker 3: in threads in and let's see what portfolio gets. It's
Speaker 3: supposed to be a big one. So well, it might
Speaker 3: be not to do with digital issues.
Speaker 5: There are some issues vonder Lene and the new term.
Speaker 5: Right four hundred and fifty million people, most in the EU,
Speaker 5: A lot of them watched this program. Jan what's kind
Speaker 5: of on her gender informing a new commission and the
Speaker 5: team that she wants to assemble.
Speaker 3: Well in the agenda and the team she wants to
Speaker 3: assemble at two diffil matters, we know that she's not
Speaker 3: very pleased with the fact that most member countries member
Speaker 3: states put to put forward male candidates as opposed to
Speaker 3: two candidates of both male and female. She wanted to
Speaker 3: guarantee a gender balance within the college the way they
Speaker 3: call it, but so far should the count is skewed
Speaker 3: in favored men. When it comes to the actual agenda,
Speaker 3: we kind of got a glimpse of what it might
Speaker 3: contain last week when the landmark Drugy Report was unveiled
Speaker 3: by Mario Dragi, former Preme Minister of Italy and President
Speaker 3: of the European Center Bank ear Slemont. Lion Is made
Speaker 3: bay clear that she will use that pro competitiveness agenda
Speaker 3: to forge next mandate.
Speaker 5: Regulation of technology has been a top priority for this term.
Speaker 7: How big a priority.
Speaker 5: Will it be for the next five year term.
Speaker 3: It depends on how much Underlon decides to actually clave
Speaker 3: to the Letter of Drugs Report, because if you go
Speaker 3: by that document, the time for regulation is kind of uh.
Speaker 3: The time of regulation was the past, where the future
Speaker 3: has would be all about encouraging innovation, competitive competitiveness, big
Speaker 3: mergers of national champions center telecom and defense contractors. So
Speaker 3: it should be less about regulation and much more about
Speaker 3: building technology, at least encouraging European technology companies to emerge.
Speaker 3: So if that's what happens, regulation will be kind of
Speaker 3: the backbone the bedrock on which a new end of
Speaker 3: agenda would be built, which would be much more about
Speaker 3: innovating regulating.
Speaker 5: Bloomberg's gen Bob Bacelly. Great to have you on the
Speaker 5: show from Brussels. Thank you very much. Let's get to
Speaker 5: another top story. Shares of Trump media down in today's
Speaker 5: trading following another shocking development in the US presidential campaign yesterday,
Speaker 5: when members of the Secret Service engage what law enforcement
Speaker 5: described as a rifle wielding potential assassin near former President Trump.
Speaker 5: Gunfire erupted at his Palm Beach course while he was
Speaker 5: playing golf. In the immediate aftermath, Trump emailed supporters to
Speaker 5: declare he was quote safe and.
Speaker 7: Well and on dj T carry.
Speaker 5: I think it's worth pointing out real quick that on
Speaker 5: Friday he had said he wouldn't sell out of his shares,
Speaker 5: and that's been a factor in that name as well.
Speaker 7: What we got coming up.
Speaker 4: Coming up a US appeals court ed is hearing challenges
Speaker 4: to the TikTok BANLRD. We're going to be joined by
Speaker 4: Doug Kaladas follow at the Harvard Belfa Center on what
Speaker 4: to expect.
Speaker 6: Meanwhile, just checking on some shares for a moment, because
Speaker 6: Boeing is moving.
Speaker 4: We understand, of course that they are looking at a
Speaker 4: hiring freeze. They're instituting that and considering temporary furloughs after
Speaker 4: some employees went on strike Friday. This is according to
Speaker 4: a memo to employees from the CFO Bran West.
Speaker 5: This is Blue Meg Technology, Ali Barber and Small Arrival
Speaker 5: JD dot Com, both under pressure as investors a weighing
Speaker 5: the potential fallout from US plans to begin taxing packages
Speaker 5: worth less than eight hundred dollars. Washington's latest move to
Speaker 5: clamp down on tax free imports of Chinese goods is
Speaker 5: closing a loophool that Temu and Shean have employed for
Speaker 5: years to ship hundreds of millions of packages into the
Speaker 5: US annually, helping them carve out a market at the
Speaker 5: expense of Amazon.
Speaker 7: We'll keep tracking that.
Speaker 5: Today, TikTok is making its fight against the US ban
Speaker 5: to the next level in the American court system. The
Speaker 5: US Court of Appeals for the DC cirguit will hear
Speaker 5: arguments against the new law signed by President Joe Biden
Speaker 5: banning TikTok in the US if it's China based parent company,
Speaker 5: byte Dance, does not divest ownership by January nineteenth. Dougkladas
Speaker 5: is a Harvard Belfa Center fellow and former chief of
Speaker 5: staff to Senator Amy Klobuchar, and joins US now. And
Speaker 5: at the heart of the argument from TikTok is the
Speaker 5: First Amendment that the law impinges upon the freedom of
Speaker 5: speech of TikTok's one hundred and seventy million or so
Speaker 5: users in the United States.
Speaker 7: How successful is that argument going to be we'll find
Speaker 7: out ed this is the top case.
Speaker 9: On the one side, you have first Amendment writer of
Speaker 9: free expression, which the courts are likely they don't like
Speaker 9: to circumscribe that narrowly. They're going to give that a
Speaker 9: broad read. At the same time, you have what the
Speaker 9: US government is saying is a unique security threat that
Speaker 9: has unprecedented reach and depth. So you have strong arguments
Speaker 9: on both sides, and everyone's watching to see which way
Speaker 9: it'll come out.
Speaker 5: Doug, We the three of us, have discussed this before,
Speaker 5: and we will discuss it again. Why does the political
Speaker 5: engine not take into account more the wishes of the
Speaker 5: user base one hundred and seventy million Americans who like
Speaker 5: using TikTok.
Speaker 9: It's very difficult for lawmakers to go against the will
Speaker 9: of the voters, but it happens when there's a serious
Speaker 9: enough threat that they're willing to reach across the aisle,
Speaker 9: hold hands and do something difficult together.
Speaker 7: When there's law has passed.
Speaker 9: You saw Democrats and Republicans in both chambers vote for
Speaker 9: an overwhelming numbers, which gives everyone cover. It's very difficult
Speaker 9: to criticize one party when the other party is doing it.
Speaker 10: Just as much.
Speaker 6: Do you think it will be justified in banning.
Speaker 7: I don't know.
Speaker 9: I think this is a very difficult case to predict.
Speaker 9: It's you know, people have said we're in uncharted territory here.
Speaker 9: It seems like the First Amendment questions are very profound.
Speaker 9: At the same time, the Justice Department has laid out
Speaker 9: when many believe are very compelling reasons that TikTok is
Speaker 9: a threat to national security. Of course, a lot of
Speaker 9: this justification is done in classified filings that we as
Speaker 9: the public do not have access to. TikTok's own lawyer
Speaker 9: dom have access to this, so much of us will
Speaker 9: be decided behind closed doors by the judges and the
Speaker 9: US government, and we'll find out what happens shortly after
Speaker 9: the election if they hear to the timeline.
Speaker 4: Talking of timeline, it feels like things have changed quite
Speaker 4: a lot since last we spoke. The fura around it
Speaker 4: has died down, and I'm wondering more broadly, whether you
Speaker 4: think the focus from lawmakers is is ardent, whether their
Speaker 4: data will be as proven out from a security threat perspective,
Speaker 4: and whether a band would fix that.
Speaker 9: So prior to passing the law, the Executive brings and
Speaker 9: Congress gathered a great deal of information, and the filings
Speaker 9: lay this out. There's testimony from a lot of national
Speaker 9: security officials, a lot of public reporting about some of
Speaker 9: the links between TikTok and the Chinese Communist Party, and
Speaker 9: they've made the case. The question is whether the First
Speaker 9: Amendment permits this type of really draconian restrictions. This is
Speaker 9: an unprecedented action by the US government against a media outlet.
Speaker 9: But they're saying that the facts of this case are unique.
Speaker 9: I think we know enough about the facts, notwithstanding the
Speaker 9: classified filings, to have a sense of really what the
Speaker 9: stakes are here. But no matter which way the case
Speaker 9: comes out, people are going to be unhappy. I think
Speaker 9: even if the government proves its case and they find
Speaker 9: that n security reasons are strong enough to justify the action,
Speaker 9: there's a precedent that's going to be set for what
Speaker 9: the federal government can do with regard to technology and
Speaker 9: platforms that a lot of people can be wried about
Speaker 9: and could possibly be abused by the government in the future.
Speaker 9: It's often said that tough cases make bad law, and
Speaker 9: that may be what happens here.
Speaker 5: Doug, as a student of the law, I love this bit.
Speaker 5: But the courts will balance the freedom of speech argument
Speaker 5: against the national security interest argument. This is what the
Speaker 5: DOJ says. Given TikTok's broadreach within the United States, the
Speaker 5: capacity for China to use TikTok's features to achieve its
Speaker 5: overarching objective to undermine American interests creates a national security
Speaker 5: threat of immense depth and scale. How difficult or not
Speaker 5: will it be for the US to prove that national
Speaker 5: security threat?
Speaker 9: So it depends on what legal standard the court employs.
Speaker 9: There are different levels of scrutiny how closely they look
Speaker 9: at the government's motivations and justifications. If they apply what's
Speaker 9: called strict scrutiny, the bar is quite high, and the
Speaker 9: government has to show that there's a really compelling government
Speaker 9: government interest and that the law is narrowly tailored.
Speaker 7: To meet that aim.
Speaker 9: They go to great length and they're briefing to try
Speaker 9: to lay out the case. But it is a high war.
Speaker 9: And again, this is a case that is so unique
Speaker 9: that the presidents that are on point don't seem quite right.
Speaker 9: We know that the government can prevent foreign ownership of
Speaker 9: radio and television companies, but they do that under the
Speaker 9: licensed authority. They have much more restricted powers when it
Speaker 9: comes to print sources. So is TikTok more like a
Speaker 9: print source or is it more like a radio or
Speaker 9: television station.
Speaker 7: It's only different.
Speaker 9: And that's what the court is going to have to
Speaker 9: contend with.
Speaker 6: Just briefly.
Speaker 4: We've heard, of course from TikTok. The argument remains the same.
Speaker 4: This band would devastate seven million businesses. They also talk
Speaker 4: with the one hundred and seventy million Americans that Ed
Speaker 4: already referenced. You understand the world of lobbying, having worked
Speaker 4: in that world previously, what will it be like behind
Speaker 4: the scenes.
Speaker 9: So what's interesting about the effort, the lobbying effort before
Speaker 9: the bill was passed, was that TikTok put a lot
Speaker 9: of money and resources and effort into trying to prevent
Speaker 9: a law from passing, and it was entirely in effective.
Speaker 9: Now we can talk about tactics, and they took some
Speaker 9: steps that people believe backfired. But it seems more important
Speaker 9: the fact that it is a foreign company, and fundamentally,
Speaker 9: foreign owned entities have different rights under the US Constitution.
Speaker 9: They are restricted in some methods they can use to lobby.
Speaker 9: And there's a lot of US type companies that don't
Speaker 9: love TikTok and we'll be quite happy to see it
Speaker 9: go away. And they also have their own lobbyists, so
Speaker 9: it goes both ways.
Speaker 4: Once who don't love them, perhaps competitors half in PATHA
Speaker 4: center fellow Diclidis, thanks for joining us.
Speaker 6: Now let's talk about China a little more.
Speaker 4: It's claimed a breakthrough in the development of homegrown chip
Speaker 4: making equipment, an important step in.
Speaker 6: The overcoming US sanctions.
Speaker 4: Now the Ministry of Industry and It advised state linked
Speaker 4: organizations to use a new laser based immersion lithography machine
Speaker 4: with a resolution of sixty five nanometers all better. Basically,
Speaker 4: it's a significant step up from the previous most advanced
Speaker 4: indigenous equipment, which did around ninety nanometers.
Speaker 5: Apple shares are under pressure or off session loads, but
Speaker 5: down almost three percent. A TF Securities survey showing that
Speaker 5: pre order sales for the iPhone sixteen generation down about
Speaker 5: thirteen percent year on year from the fifteen demand, not
Speaker 5: what we thought it would be. Continued to track it
Speaker 5: because supplies under pressure as well.
Speaker 4: Cara Yeah, Mark German writing over the weekend that really
Speaker 4: was the health side of the equation that stole the show.
Speaker 4: But as Apple of course sinks this morning following last
Speaker 4: week's product launch events, the company still hasn't resolved their
Speaker 4: legal fight with Massimo court. There's a blood oxygen detection,
Speaker 4: of course that that company offers, which prompted a US
Speaker 4: ban on Apple watches featuring the technology. Now, Massimo has
Speaker 4: partnered with Google and Qualcom to develop a reference platform
Speaker 4: to help bring more smart watchers to market with their
Speaker 4: biosensing capabilities joining us now.
Speaker 6: Jokiani, the CEO of the company, and what is this about.
Speaker 4: You have impressive health features, but Apple watched we just
Speaker 4: heard the new unveiling they're getting sleep apnea and the like.
Speaker 6: How do you compete their Joe.
Speaker 1: Well, we compete based on good science. We have continuous,
Speaker 1: accurate SPO two palsphorate. We can even measure hydration a
Speaker 1: pulsephrate variability.
Speaker 2: Nobody else has that.
Speaker 1: In fact, I don't understand how you can do sleep
Speaker 1: apnea without SPO two. I know clinically it's not done.
Speaker 1: So it'll be interesting to see if Apple's promising things
Speaker 1: they can't deliver again like they did with their SPO two,
Speaker 1: or they really have figured out how to do it
Speaker 1: without SPO two.
Speaker 7: Time will tell.
Speaker 4: So you're offering this platform with Quilcom, You're helping Google
Speaker 4: offer more smart watches, more health features. It feels as
Speaker 4: though that Joe, Look, if you don't think that Apple
Speaker 4: can deliver what it promises, does that mean more cord action.
Speaker 6: Where does your fight currently stand with Apple and it's
Speaker 6: smart one.
Speaker 1: Well, we, as you know, enjoined Apple from selling SPO
Speaker 1: to in the US. Uh, there's a trade secret case
Speaker 1: that's going to be reheard, and if we win that,
Speaker 1: then we'll have a broad injunction against them on photo
Speaker 1: platismography so they can't even do pulse rate and a
Speaker 1: rhythme detection.
Speaker 2: And then if we win our patent.
Speaker 1: Case, which is about how do you do photo pedtasmography
Speaker 1: with very low battery consumption, then that'll be even a
Speaker 1: wider injunction. So potentially our injunction could go worldwide and
Speaker 1: much broader. However, what's really cool is this partnership with Google,
Speaker 1: which I'd love to tell you more about if we're
Speaker 1: excited about it. Every Android user now can have a real,
Speaker 1: scientifically based, continuous, accurate wearable with this reference design we're
Speaker 1: creating with them, and I think in the next couple
Speaker 1: of years you're going to see a slow slewth of
Speaker 1: products from luxury products to smart watches from the typical
Speaker 1: Android world. That will be an incredible offering for our
Speaker 1: mutual customers.
Speaker 4: I hate to say, Joe, because we've only got a minute,
Speaker 4: so I ask to be brief. But you've got some
Speaker 4: fascinating things happening. You've got a proxy battle going on
Speaker 4: at the moment. They want to see more governance, want
Speaker 4: to have more board oversight.
Speaker 6: How do you fight Poltan?
Speaker 1: Well, you saw that Polton was found to have lied
Speaker 1: to our shareholders. The court, a federal judge found multiple
Speaker 1: lives held them in contempt. So you've got someone who
Speaker 1: has no integrity that talks about governance. Yeah, you have
Speaker 1: us who've done everything right morally right, not just even legally,
Speaker 1: and we've made all this progress from bringing the business
Speaker 1: through COVID and now this incredible Google partnership. I think
Speaker 1: this should be ninety one percent to nine percent. Only
Speaker 1: person voting for him should be him.
Speaker 2: Joe.
Speaker 6: We wish you can have more information from you. Maybe
Speaker 6: we'll get you back.
Speaker 4: After the vote comes September the nineteenth.
Speaker 6: Free.
Speaker 4: Thank you, Jokani CEO, Masimo. This is bloom meg Technology.
Speaker 4: Welcome back to Bloomberg Technology. I'm Caroline Hide, New York and.
Speaker 7: Ed Ludlow here in San Francisco.
Speaker 5: Another megacap named Microsoft just announced that Voda Phones signed
Speaker 5: a large deal to use AI Assistance for Office and
Speaker 5: unveiled a range of new AI tools designed to help
Speaker 5: workers create Excel charts, prioritize emails, and collaborate with one another.
Speaker 7: Listen to this.
Speaker 11: You can think of core Pilot as the UI for AI.
Speaker 11: It helps you break down these silos between your work artifacts,
Speaker 11: your communications, and your business parcesses. And we're just getting started.
Speaker 5: Bloomberg's Dina bas Is here with the details, and diner
Speaker 5: I point out that when Microsoft started its presentation about
Speaker 5: eleven New York time stock was modestly lower.
Speaker 7: It is now modestly higher.
Speaker 5: But in Vodaphone's case, it's kind of evidence finally of
Speaker 5: how workers might use AI in the workplace for actual stuff.
Speaker 7: Give us the details.
Speaker 12: Sure, yeah, and this is you know, this is a
Speaker 12: pricey offering Microsoft. If you do this, they're asking me
Speaker 12: to pay thirty bucks a month per user, in addition
Speaker 12: to what you already pay for office licenses.
Speaker 2: So part of what they're trying to do today is twofold.
Speaker 12: They want to demonstrate new features, and there's some discussion
Speaker 12: of that, but they also want to demonstrate new customers
Speaker 12: that people are actually using this and that it's helping
Speaker 12: them do things that it's saving them time.
Speaker 2: And so you know, one of the things they mentioned around.
Speaker 12: Vodaphone, which has been trying it out with a smaller
Speaker 12: group of people, is that those early trials found that
Speaker 12: workers saved about three hours a week per person, which
Speaker 12: may sound modest, but it's a start. I think that
Speaker 12: that's one of the things they really have to demonstrate
Speaker 12: is that these are useful tools and not just like
Speaker 12: a fun thing or something that companies going to spend
Speaker 12: money on and not really know how to use effectively.
Speaker 4: Call them copilots, call them agents. Everyone's discussing it. You've
Speaker 4: got salesforce now Microsoft and ultimately Microsoft competing against its
Speaker 4: own technology.
Speaker 6: Provider here open ai. How does it distinguish itself sture.
Speaker 2: That's a lot of what we're hearing today.
Speaker 12: The event today is focused not on consumers but on
Speaker 12: corporate customers, and it heavily leverages Microsoft's you know, long
Speaker 12: standing stronghold in the corporate commuting space, which is office
Speaker 12: of course. So the copilots that are being discussed today
Speaker 12: are for things like Excel, Teams, Word Outlook, email, and
Speaker 12: the idea is that you know, whether it's competing with
Speaker 12: open Ai, or Salesforce or other business software companies. The
Speaker 12: real kind of you know, stronghold beachhead that Microsoft has
Speaker 12: with corporate Customers's office, so to the extent that they
Speaker 12: can create useful artificial intelligence features that work with our
Speaker 12: that's something that no one else can offer. One of
Speaker 12: the biggest strongholds that really people have not been able
Speaker 12: to replace Microsoft in is Excel spreadsheets. You know, financial analysts,
Speaker 12: people who really live in Excel say, you know, for
Speaker 12: the most part, can't really use anything else. And Microsoft's
Speaker 12: been trying to figure out how to get the AI
Speaker 12: copilot working well and in a useful fashion and what
Speaker 12: they hope will be a critical fashion that Excel and
Speaker 12: they announced you know, some new features around that today,
Speaker 12: and in particular that they're going to integrate the Python
Speaker 12: programming language, which is really popular for data work, into
Speaker 12: the Excel AI copilot in a way that lets people.
Speaker 2: Use it without having actually no programming code.
Speaker 12: You could just make a regular you know, English language
Speaker 12: or plane speech queries.
Speaker 5: You've covered this company for a long time, and I
Speaker 5: always reflect in Microsoft's history that they're really good at
Speaker 5: selling stuff software you could probably get otherwise for free
Speaker 5: somewhere else the co Pilot's thirty dollars per month per use.
Speaker 5: So if you have a company with thousands of employees,
Speaker 5: you think they'd start having immense revenue growth. When does
Speaker 5: the street think they will?
Speaker 12: Everyone's trying to figure that out, and it's it's going
Speaker 12: to be even harder because let's be clear that when
Speaker 12: Microsoft reports earnings, it's not as if they're breaking it
Speaker 12: out in such a way where you can say, oh, this,
Speaker 12: you know, this increase in Office is due to to Copilot.
Speaker 2: You know.
Speaker 12: Again, they gave some numbers today, but they don't you know,
Speaker 12: they're positive for Microsoft, but not terribly specific. And so
Speaker 12: they said, for example, the Copilot customers increased by more
Speaker 12: than sixty percent quoter on quoter, the number of clients
Speaker 12: with more than ten thousand users doubled, But we don't
Speaker 12: know what that translates into into raw numbers.
Speaker 2: We don't know what that translates into revenue.
Speaker 12: And also I began by saying thirty dollars per user
Speaker 12: per month, that's the list price. Most corporate customers they
Speaker 12: use Office do that through a multi year enterprise agreement,
Speaker 12: and there is you know, the way agreements work in
Speaker 12: this industry, there there's discounting, so we don't really know
Speaker 12: if they're you know, particularly for these early customers, or
Speaker 12: they're giving them any sort of promotional pricing.
Speaker 6: Diana Bass, thank you very much.
Speaker 4: Indeed, let's keep the discussion going across Microsoft and more
Speaker 4: broadly and a Mentionment Portfolio Manager, Fidelities, Select Semiconductors Portfolio,
Speaker 4: and plenty of others as well. Adam, it's great to
Speaker 4: have you because some of the funds that you help
Speaker 4: manage have a sizable exposure to Microsoft.
Speaker 6: Are they owning their moat at the moment?
Speaker 7: Thanks for having me.
Speaker 13: Look, you know, as you talked about in the segment before,
Speaker 13: you know, we're pretty early in AI and thirty dollars
Speaker 13: per user per month is a lot to ask, and
Speaker 13: even if it's being discounted, you know, we're talking about
Speaker 13: something that's going to take a while to play out,
Speaker 13: and having these tools be used and people figure out
Speaker 13: how to use them.
Speaker 7: Will take a while.
Speaker 13: But the use cases are rolling out and we're going
Speaker 13: to see this over the next you know, several years
Speaker 13: for sure.
Speaker 6: The question is what's priced in?
Speaker 4: And I was discussing on Earlier, which has had a
Speaker 4: massive rally last week and the chip designer a new
Speaker 4: call on the street saying that the price is already.
Speaker 6: Reflecting a lot of the upside here.
Speaker 4: Is that the case for the MAG seven for technology
Speaker 4: more broadly, as we start to see rates getting cut.
Speaker 13: Yeah, sure, I mean to talk about the MAG seven
Speaker 13: in one case is hard, right. There's seven different companies.
Speaker 13: They all have different businesses. Three of them have cloud
Speaker 13: businesses of course, so they overlap, but outside of that,
Speaker 13: they're very different businesses.
Speaker 7: And I think, you.
Speaker 13: Know, just centering in on AI in general, I think
Speaker 13: there is a lot of you know, consternation in the market.
Speaker 13: Clearly you're talking about the FED and interest rates and
Speaker 13: the macro environment, which is, you know, one whole piece
Speaker 13: of what's going on and something I need to pay
Speaker 13: attention to as a portfolio manager.
Speaker 7: But from a technology perspective and just.
Speaker 13: Generative, AI is evolving and we're still really early days
Speaker 13: in this. I know the market has this desire to
Speaker 13: sort of have instant gratification that we're just going to
Speaker 13: see it all all of a sudden.
Speaker 7: This is a super complex problem.
Speaker 13: We need to roll out all this infrastructure, get the
Speaker 13: compute in place, train these models, retrain the models and.
Speaker 7: Then roll them out over time. This is going to
Speaker 7: take some time.
Speaker 13: So you know, in terms of what's priced in, it's
Speaker 13: it's really hard to talk about it. You know, broadly speaking, clearly,
Speaker 13: there's some stocks that have been overpriced, you know, that
Speaker 13: have priced in a lot of their upside. If you
Speaker 13: look back in twenty three, just as an example, there
Speaker 13: was this dynamic where everyone was an AI winner. Well
Speaker 13: look at you know, fast forward to twenty four, you've
Speaker 13: seen some separation. You know, you mentioned Inteller as an
Speaker 13: early example. That stock was up ninety five percent in
Speaker 13: twenty twenty three. That stock is down sixty.
Speaker 7: Percent this year.
Speaker 13: So we're starting to see a separation of not everyone's
Speaker 13: gonna win and they're gonna be winners, there's gonna be losers.
Speaker 13: And yeah, certainly there's there's certainly stocks that have priced
Speaker 13: in a lot of this goodness and then there's some
Speaker 13: that haven't.
Speaker 5: Adam, it's called eli in ings, and you've talked about
Speaker 5: not maybe seeing something immediately to the satisfaction faction of
Speaker 5: the market. But now the earning season's out the way.
Speaker 5: We've discussed what kind of jacket Jensen was wearing and
Speaker 5: how bullish a signal that was is this story in
Speaker 5: tact for you, the big picture AI investment cycle story.
Speaker 13: I mean, once again, it's it's hard to say, you know,
Speaker 13: broadly speaking, to capture every company, but I think in
Speaker 13: terms of AI, you know, I still think we're very
Speaker 13: early in this in this cycle, and there's some companies
Speaker 13: that I think are going to massively benefit here, and
Speaker 13: we're going to continue to see this out. And and
Speaker 13: I think, you know, when I look back, you know,
Speaker 13: June period, it felt like kind of everyone was in
Speaker 13: the boat, and now there's a lot of skepticism, there's
Speaker 13: a lot of concern, and that's really healthy for the market.
Speaker 7: But I think, you know, this is going to be
Speaker 7: a journey.
Speaker 13: There's going to be a bumps along the way, and
Speaker 13: and and the stocks also, you know, disconnect with the
Speaker 13: fundamentals at different times. You know, stocks sometimes price in
Speaker 13: too much, sometimes they get too negative, and so you know,
Speaker 13: you got to think about it from that perspective as
Speaker 13: you manage money.
Speaker 5: And in my job for for my investors, Adam, every
Speaker 5: day I think not just about the GPU bought high
Speaker 5: bandwidth memory etheranet as well, you know, areas of the
Speaker 5: market that perhaps appreciated in that supply chain. What are
Speaker 5: the areas that you feel right now underappreciated or misunderstood.
Speaker 7: Sure, I mean that that's a there's a long answer
Speaker 7: to that.
Speaker 13: But but you know, I think you know, overall there's
Speaker 13: been this emphasis on chips, and I think you know
Speaker 13: where people are getting it wrong a little bit is
Speaker 13: these are really data centers, right, these are supercomputers.
Speaker 7: You know, Nvidia doesn't sell a chip.
Speaker 13: You know, if you look at Blackwell, they have seven
Speaker 13: different chips that day designed. It's a full system and
Speaker 13: it's a full stack solution with software, the algorithms, and
Speaker 13: the libraries that are really important to make all this work.
Speaker 13: So but within that, you know, as you mentioned high
Speaker 13: bandwidth memory. Without high bandwidth memory, that's crucial to making this.
Speaker 7: You know, evolution of AI happened.
Speaker 13: You know, there's a lot of interconnects that are super
Speaker 13: important in terms of networking. You mentioned Ethernet that's important,
Speaker 13: so is in Finamon. There's other interconnects like you know
Speaker 13: Esteri Labs makes that went public back in March, that
Speaker 13: is super important, and optical interconnects as well. So there's
Speaker 13: a ton of things that make this happen, but people
Speaker 13: need to be thinking about it, not on a chip
Speaker 13: by chip basis, but more.
Speaker 5: On a systems level. Telary Portfoilio manager Adam and Benjamin.
Speaker 5: Great to have you here on Bloomberg Technology.
Speaker 7: Really appreciate it.
Speaker 5: Now coming out, We're gonna be joined by LTK president
Speaker 5: Amba Ben's box talk about the state of the creator economy,
Speaker 5: even as TikTok's future in the United States is up
Speaker 5: in the air. This is Bloomberg Technology. Okay, time for
Speaker 5: talking tech and first up. SpaceX's Polaris Dawn Cruz splash
Speaker 5: down off the coast of the dry Tortugas, Florida yesterday.
Speaker 5: This after their historic first commercial spacewalk on Thursday. The
Speaker 5: SpaceX capsule hurtled through the atmosphere before gliding into the
Speaker 5: ocean for landing. Plus AI startup GROC has partnered with
Speaker 5: oil producer a Ramcodes to build out data centers in
Speaker 5: Saudi Arabia with the hopes of becoming a hub for
Speaker 5: companies across the Middle East, Africa and India. Aramco will
Speaker 5: fund the development that is expected to cost quote in
Speaker 5: the order of nine figures and a Jeff Bezos back
Speaker 5: group says it's setting up a program to attract investment
Speaker 5: into South African power grids. The Global Energy Alliance for
Speaker 5: People on Planet says it will work with partners for
Speaker 5: investments to repair and upgrade the grids, needing nearly eighteen
Speaker 5: billion dollars for the introduction of renewable energy.
Speaker 6: Carol, Now, let's talk about the creator economy ed as.
Speaker 4: Today is LDKAS twelfth annual conference, bringing together nearly four
Speaker 4: hundred top global creators to discuss the state the feature
Speaker 4: the industry. LTK co founder and president Ambaven's Books joins
Speaker 4: us now.
Speaker 6: And I'm a congrats.
Speaker 4: A lot of ye is under the belt of this event.
Speaker 4: What are the concerns, what are they worried about?
Speaker 14: Do things top of mind for our creators?
Speaker 10: This year and last month we just had three billion
Speaker 10: dollars invested in LTK creators on the LTK platform. We're
Speaker 10: continuing to see dollars rotate in as our creators think
Speaker 10: about preparing for the future of their business. The two
Speaker 10: things their top of minor community. Where are they going
Speaker 10: to retain, nurture and grow that community. We know that
Speaker 10: for a creator, the plot is that they have to
Speaker 10: have a community that they can access and that has
Speaker 10: high trust with them that they're engaging with constantly.
Speaker 14: So, first of all, in the community side.
Speaker 10: Where are those where is that community being built, and
Speaker 10: how are they going to continue to engage them. On
Speaker 10: the other side, we released a massive suite of AI
Speaker 10: tools for both our creators and our brands.
Speaker 14: Today are the type of tools that's not AI for
Speaker 14: tech's sake.
Speaker 10: These are the things that are moving their business forwards.
Speaker 10: This is driving efficiencies, it's doing work for them, it's
Speaker 10: taking subjectivity out of the decision making, and we expected
Speaker 10: to drive big outcomes for both brands and creators. We
Speaker 10: now see that the vast majority of every single demographic
Speaker 10: in the United States says that they are shopping from creators.
Speaker 10: Creator guided shopping has arrived, and lt K is a platform.
Speaker 14: That powers creator commerce.
Speaker 4: If they're not building community in the way that they
Speaker 4: were on the normal platforms, what is happening?
Speaker 6: And but how are they driving dollars?
Speaker 10: Well, it's a great question connected to a lot of
Speaker 10: the conversations today. Over the last decade, they've spent their
Speaker 10: time really investing in social media platforms because those platforms
Speaker 10: actually used to be the place where they could collect,
Speaker 10: nurture and grow that community and meet them every day.
Speaker 10: And what we've seen is that over the last several years,
Speaker 10: especially acutely over the last year, these platforms have moved
Speaker 10: from being people based.
Speaker 14: To interest space.
Speaker 10: We see that people are spending more time on these platforms,
Speaker 10: but they are reporting much less of a productive experience there.
Speaker 14: They really are missing out on the human connection.
Speaker 10: So lt K has been investing in a place for
Speaker 10: creators to actually keep their audiences, grow them, reach them
Speaker 10: on a daily basis. Because the job that social media
Speaker 10: platforms have they've really abandoned as they've of course leaned into,
Speaker 10: as they would their revenue model, which they're not created
Speaker 10: to help a creator reach their community. They're created to
Speaker 10: be an advertising product. And so we filled that void
Speaker 10: for these creators and so they're.
Speaker 14: Doing it on their LTK.
Speaker 10: LTK is now shipped to become a video first platform
Speaker 10: that striving major outfrome comes for these creators. In the
Speaker 10: last month, we've made some shifts that have resulted in
Speaker 10: people watching over five minutes at a time on a
Speaker 10: creator's channel. Through video, we know that connection with their
Speaker 10: audience is really important. High trust is why this industry exists.
Speaker 5: And why it works amber Exactly a week ago, I
Speaker 5: was in the Steve Jobs Theater at Apple Park for
Speaker 5: the new iPhone event and let's say hundreds thousands, hundreds
Speaker 5: of creators there. They all use different technology to make
Speaker 5: their content and they will publish it in different paces.
Speaker 5: But I just found myself thinking, like, what a crowded field?
Speaker 5: Do you get that sense that there are now just
Speaker 5: so many creators that the value is a bit of
Speaker 5: a question.
Speaker 10: You know, they're actually millions of creators with over a
Speaker 10: million followers, So as you think about those of consequence. Today,
Speaker 10: LTK works with three hundred thousand creators, and that's globally,
Speaker 10: about half of them.
Speaker 14: Are here in the US.
Speaker 10: We're working with professional creators, and really, for a brand today,
Speaker 10: they don't have to depend on looking at follower accounts
Speaker 10: or views to understand the influence of a creator. Then
Speaker 10: come to LTK and see what their community is actually doing,
Speaker 10: not just from top of funnel, but all the way
Speaker 10: through to actually purchase behavior, which is becoming increasingly important
Speaker 10: for these brands, especially in this economy. They're looking for
Speaker 10: ROI and those are the types of metrics that they need.
Speaker 10: What I love in what you're mentioning is actually the
Speaker 10: suite of tools that's required for a creator to do
Speaker 10: their work does depend on the likes of Apple, and
Speaker 10: so that's been fuel to this whole industry. The fact
Speaker 10: that I have every tool that I need in my
Speaker 10: pocket right now for free is incredible, and so we're
Speaker 10: really excited about the innovation that we're seeing from even
Speaker 10: the hardware in the industry.
Speaker 5: LTK President Amavn's books. Great to have you back here
Speaker 5: on Bloomberg Technology.
Speaker 7: Thank you.
Speaker 5: Now for a look at last night's Primetime Emmys. TV
Speaker 5: drama Showgun gave Disney the top Emmy for the first
Speaker 5: time in nineteen years. The show, film primarily in Japanese,
Speaker 5: set a record for the most wins by a single
Speaker 5: show in one year, with eighteen across the Primetime Emmys
Speaker 5: and last week Creative Arts Awards, while HBO claimed Top
Speaker 5: Comedy with Hacks being out Hulu's The Bear, Disney earned
Speaker 5: the most awards of any entertainment company. Let's get more
Speaker 5: and bring in bloombergs Lucas Shaw, who leads our screen
Speaker 5: time coverage and Late Sunday Night for you. Showgun for me,
Speaker 5: it's been one of the top of the year. But
Speaker 5: there's a success story for Disney in there as well.
Speaker 15: Yeah, I mean to put it in perspective, Barbeiger was
Speaker 15: both at the Emmys and then also at the Disney
Speaker 15: after party. That is not something that he usually attends.
Speaker 15: I think he was there because he knew this was
Speaker 15: a big night for the company. You know, the winning
Speaker 15: poper Awards with the Oscars and Emmys hasn't historically been
Speaker 15: sort of a part of the Disney strategy. They're making
Speaker 15: these big popcorn pictures, big commercial television shows based on
Speaker 15: things like Marvel and Star Wars. But FX in particular
Speaker 15: just had a huge night. Even though The Bear didn't
Speaker 15: win Best Comedy Showgun and the Bear combined, I think
Speaker 15: when twenty nine Awards, it was enough to make FX
Speaker 15: the top network on.
Speaker 6: Television, top network.
Speaker 4: You've been speaking with top leadership there as well. At
Speaker 4: the moment we've been done and Waldron, she was at
Speaker 4: your event last year as well, screen Time, and I'm
Speaker 4: just really interested in You've got this event coming up
Speaker 4: of course in la October ninth and tenth, we're all
Speaker 4: gonna be there, We're gonna be broadcasting live. Can you
Speaker 4: just quickly tell us what we're gonna expect to said
Speaker 4: more about Disney's prowess.
Speaker 15: Sadly know Disney this year because they have an executive
Speaker 15: leadership retreat in Florida the same week as screen Time,
Speaker 15: but we'll have people from just about every other company,
Speaker 15: top leaders from Netflix and Amazon. We'll love the CEO
Speaker 15: of Comcast, We'll love the CEO of Live Nation. You know,
Speaker 15: some fun celebrities as well, Snoop Dogg, Harry Washington, and
Speaker 15: the creator of South Park among them. You know, we're
Speaker 15: going to be talking about just the crazy time this
Speaker 15: is in the business of media and entertainment, you know,
Speaker 15: with companies merging, fighting and really unsure about the future
Speaker 15: of the key of their business. You know, you guys
Speaker 15: were talking about Apple. Apple at least knows what its businesses,
Speaker 15: makes a lot of money that way. A lot of
Speaker 15: these TV and movie companies are still trying to figure
Speaker 15: out this streaming thing still.
Speaker 5: One such drama is Disney and Direct TV. Right, Carrie,
Speaker 5: just fifteen seconds, Lucas, More dramas come.
Speaker 15: Definitely more carriage flights to come, but not for Disney
Speaker 15: in the near future.
Speaker 6: That was quick, Lucas Shaw, So on it.
Speaker 4: We Thank you up late on early for us and
Speaker 4: Blombog screen time is happening October ninth and tent You
Speaker 4: do not want to miss it live with Lucashaw and
Speaker 4: a few helpful others.
Speaker 6: That does it. For this edition of Bloomberg Technology.
Speaker 5: They had Yeah what a frantic starts the week recap
Speaker 5: on the podcast. You know where to find it terminal
Speaker 5: on Apple, Spotify, and iHeart online the team out in
Speaker 5: New York City. Good morning from the team out here
Speaker 5: in San Francisco. This is Bloomberg Technology.